UK House Prices Up a Full 8 Per Cent
According to official figures, house prices across the United Kingdom have risen by a full 8 per cent since this time last year, despite a slight fall during March. The .5 per cent drop in average house prices throughout March – from £253,000 to £252,000 – was allegedly the result of tough new lending rules (according to leading economists), that were designed to make it much more difficult for prospective homeowners to apply for a mortgage. The general belief though, is that house prices will return to normal once the people adjust to the new rules.
A Temporary Dip
Real estate agents and brokers from Quickmove Conveyancing, amongst others, may have been licking their lips in March, expecting a mass influx of custom as house prices dropped. Their expectations were probably short lived however, as chief economists soon came out to explain the sudden drop in prices. “This was just a temporary dip”, says Howard Archer, UK and European economist at IHS Global Insight. “There's no doubt that house prices will begin to rise solidly over the coming months”. The figures certainly seem to support this, with average prices in London rising a massive 17 per cent (£398,000 to £459,000) since March 2013, in addition to the average nationwide growth of 8 per cent.
A Distance Between London and the UK-wide Market
Some are concerned though, that London's steadily rising figures may lead be misleading, particularly as far as future governmental decisions are concerned. Director of mortgage club and housing at Legal & General, Stephen Smith echoed these thoughts, insisting that the government must be willing to recognise that every area within the UK needs to be supported in different ways. “The government cannot make big decisions for the whole of the country based simply on London's figures. They do not represent the nationwide housing market on the whole”. Mr Smith went on to suggest that there was definitely a two-speed housing market in operating in the UK at the moment, with London racing ahead of all other areas.
A Bad Time For 1st-Timers
There's no doubt that those who'll be hit the hardest by the growth are first-time buyers. Since March of 2013, the average price paid for a first home has risen by 10 per cent (compared to a 7 per cent rise for existing owners), from £175,000 to £193,000. Sadly, for first time owners, they are already at a disadvantage; as a result of having no existing home equity, they are unable to benefit from the rising value of homes in the country. Director of e.surv chartered surveyors, Richard Sexton says that “it is vital that first-time buyers continue to be supported, and that we do not allow them to be priced out of the market. In order to safeguard the supply situation, we simply need to build more homes.”
Rapid Recovery of the UK Market
Whether Sexton's solution bares and weight or not remains to be seen. What does seem certain however, is that the housing market within the UK is, on the whole, experiencing a very rapid recovering since last year.